GNOME versus Groupon

While the patent system isn't exactly popular among free-software developers, the privileges accorded by trademark law remain valuable for some free-software projects. For example, Mozilla has benefited from being able to control its brands. There remains a conflict, though, between the redistribution and modification rights that free software accords its users, and the restrictions imposed by a trademark on that software, with the dispute between Debian and Mozilla (that led Debian to rebrand Firefox as Iceweasel) as a classic example. A recent (and apparently resolved) disagreement between the GNOME Foundation and the daily-deals web site Groupon reflects how valuable trademarks can be in the open-source world, as the conflict illustrated the goodwill in the marketplace that the "GNOME" trademark enjoys.

Last May, Groupon issued a press release announcing "Gnome, a new tablet-based platform that will provide sophisticated tools to local merchants to run their businesses more effectively and understand their customers better". Groupon decided to trademark its use of the word "Gnome", variants like "G-NOME", and the phrase "GNOME BY GROUPON" in association with goods and services involving, among other uses, "computer hardware and software for processing point of sale transactions".

But, back in 2006, the GNOME Foundation had already registered a trademark on the word "GNOME" used in association with goods and services involving "downloadable computer software", "computer software development", and other related products. According to the GNOME Foundation, on a call-for-help page it posted online on November 10, efforts to communicate with Groupon about its concerns over the GNOME brand identity were made soon after Groupon's product announcement. The Foundation alleged that these talks broke down and that Groupon continued to seek the registration of additional trademarks.

The Foundation faced a deadline of December 3 to file legal paperwork starting formal opposition proceedings against some of Groupon's trademark applications. On the call-for-help page, it asked the open-source community to donate $80,000 to fund its battle: "Our counsel has advised us that we will need $80,000 to oppose the registration of the first set of 10 applications. If we are able to defend the mark without spending this amount, we will use the remaining funds to bolster and improve GNOME". At the end of the Foundation's statement, there was a link to PayPal to donate, as well as a note that "GNOME can also accept donations by check, bank/wire transfer, Flattr and Bitcoin". As of the morning of November 12, over $100,000 has been raised.

After the issue became more public, and donations started to roll in, Groupon responded by announcing its stance:

As the outcry continued, Groupon relented. A few hours after the initial announcement, Groupon declared it was no longer interested in registering trademarks on the word "Gnome": "After additional conversations with the open source community and the Gnome Foundation, we have decided to abandon our pending trademark applications for 'Gnome.' We will choose a new name for our product going forward". GNOME and Groupon released a joint statement soon after, announcing that the two organizations will be collaborating to ensure that there will be no trademark issues between them in the future:

An examination of US trademark law shows that it was likely prudent of Groupon to abandon its pursuit of these trademarks. In the US, a trademark is considered to be infringed by a similar trademark if there would be a "likelihood of confusion" caused in the marketplace by the trademarks co-existing. There are a number of different tests for "likelihood of confusion" across the different Circuits of the US court system, with considerable variety between them. An empirical study [PDF] of these tests, done by New York University law professor Barton Beebe, criticized both their lack of harmony and inconsistencies in their application by the courts. The US Supreme Court will likely clear up the confusion within the next year when it makes a ruling in a case that addresses the issue.

Until the Supreme Court makes a decision, we can turn to Beebe's study to see how this case might have played out in the courts. Beebe found that likelihood-of-confusion cases tend to turn on the following factors: the similarity of the marks; the likelihood consumers would believe, incorrectly, that the products branded with the trademarks are sold from the same organization; and bad faith on the part of the defendant. If Groupon hadn't capitulated, it would be reasonable to predict that Groupon would not fare well in a legal battle over trademarks with the GNOME Foundation.

The trademarks use the same word, disposing of the first factor in the Foundation's favor. Groupon's brand presence with the general public in the US is much stronger than GNOME's: if Groupon launched "Gnome"-branded devices and services, it would be more likely than not that an "average" consumer would assume, on first encounter, that the GNOME desktop environment was designed by Groupon. This disposes of the second factor against Groupon. While GNOME might not have been able to show bad faith (the third factor) on the part of Groupon, its strong case for likelihood-of-confusion on the first two factors would probably have been enough for the Foundation to prevail in court.

Nonetheless, this David and Goliath story could have been avoided, if Groupon had acted more ethically. Any search for the use of the word "GNOME" in connection with software would have quickly led to the GNOME project and proof of its trademark rights. Groupon must have been aware of that trademark while it decided to apply for its own marks. The fact that Groupon almost immediately caved in after the GNOME Foundation went public with the conflict is strong evidence that either Groupon did not have a case, or it was unwilling to bear the sharp criticism from the open-source community. If Groupon had acted honorably in its discussions with GNOME from the beginning, it would seem that this could have all been resolved quietly—or avoided altogether.

GNOME's call-for-help page remains online, with an update at the top indicating that the matter has been settled. This hasn't deterred GNOME's supporters from continuing to donate to the Foundation through that page, however. It remains to be seen if Groupon will indeed follow through on its commitment to rename the offending goods and services, but it would seem difficult for the company to back out now. Nevertheless, open-source enthusiasts and GNOME fans can breathe a sigh of relief: a potential threat to the name and brand of a major open-source project has been defused.